Beyond 2025: The hows, whats and whens of SAP HCM on premise

At least until 2025, SAP will continue to support its existing on-premise HCM solutions. In addition, a new on-prem option powered by S/4HANA will be released in 2023, with support running until at least 2030. But what does all of that actually mean for your company? Which steps should you take, if any? Don’t worry: whatever the future brings, Flexso for People is here to guide you.

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First, let’s take a look at the updated timeline for HCM that SAP recently shared with the world.

As you can see, SAP is holding on to its 2025 deadline to move its ERP Central Component 6 (ECC6) to S/4HANA. Since SAP HCM on premise still runs on ECC6, support for this business suite is also scheduled to end in 2025. HCM on premise clients would then have to migrate their HR processes to SAP’s cloud HR solution, SuccessFactors and Employee Central payroll.

The 2023 solution

This announcement, however, was met with a lot of concern in the industry. It’s easy to see why: for many companies, SAP HCM is the backbone of their time and payroll engines. Setting this engine up and ensuring it complies with local law entails a significant investment in terms of time and money. Changing it has a disruptive effect and could possibly incite union action if employees’ paychecks are in any way endangered.

Luckily, SAP recently announced a new on-premise HCM solution to be launched in 2023: SAP HCM on-premise option for SAP S/4HANA. By trading ECC6 for S/4HANA as the driving force, HCM will be able to retrieve data much faster. And there’s more good news: SAP has committed to supporting SAP HCM S/4HANA on premise until at least 2030.

Cloud experiments

There will be some differences between the HCM version on ECC6 and the one on S/4HANA, however. Packages like Learning Solution (LSO), E-Recruiting and Travel Management (FI-TV) won’t be included anymore. For LSO and E-Recruiting, SuccessFactors will become the only option, while Travel Management will be replaced by Concur.

The core functionalities of HR Administration, Organization Management, Payroll, Time & Attendance etc. will remain. So, while companies won’t necessarily have to move their core activities to the cloud, they can already start with their talent processes.

Time is on your side

In short, companies who are not quite ready to move their HR systems to the cloud have some years before a decision is necessary. Plenty can change in that time. At Flexso for People, we keep a close eye on all the relevant developments and are ready to guide you towards an ideal solution for your specific business goals and situation. With our vast experience in technical and functional projects we can help you prepare for every possible scenario, from pre-feasibility and feasibility study to business case and beyond.

What’s next for your digital HR environment? Get in touch with our experts to book an HR assessment, and let’s figure this out together.